Do Markets Price CEOs Health Hazards? Evidence from the COVID-19 Pandemic

Juan Pedro Gómez and Maxim Mironov ()
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Juan Pedro Gómez: IE Business School, IE University, María de Molina 12, 28006 Madrid, Spain
Maxim Mironov: IE Business School, IE University, María de Molina 12, 28006 Madrid, Spain

Quarterly Journal of Finance (QJF), 2022, vol. 12, issue 04, 1-46

Abstract: We find evidence that markets anticipate the potential loss of firm value in the event of the CEO falling sick and eventually dying of COVID-19 in a sample of almost 3000 listed firms from across 137 regions in 10 European countries. First, we use soccer games as “super-spreader†events. The instrumented number of infected cases per capita in the region where company headquarters are located predicts a significant drop in stock returns during March and April 2020 for firms managed by CEOs with a higher probability of dying from COVID-19. Second, we show that the stock price of these firms increases significantly the day on which positive news on the development of COVID-19 vaccines are released in the market.

Keywords: COVID-19; CEO value; soccer; stock returns; super-spreader; vaccines; market efficiency (search for similar items in EconPapers)
JEL-codes: G01 G12 G14 M12 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1142/S201013922250015X

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